CMS Signals New Phase in Enforcement for Violations of the Hospital Price Transparency Reporting Requirements

Effective January 1, 2021, the Price Transparency Rule requires hospitals to publish the charges for at least 300 “shoppable services” (i.e., services that a health care consumer can schedule in advance) offered by the hospital. The hospitals must provide information related to the discounted cash prices, payer-specific negotiated charges, and the de-identified minimum and maximum negotiated charges for each identified service.   

The Civil Monetary Penalties (CMPs)

On June 7, the Centers for Medicare & Medicaid Services (CMS) imposed the first CMPs for failing to comply with the Price Transparency Rule against two Georgia hospitals that are part of the same health care system. Northside Hospital Atlanta and Northside Hospital Cherokee were collectively fined nearly $1.1 million for failing to comply with the reporting requirements. 

In its notices to the hospitals, CMS stated it had previously issued warning notices and requested each hospital to implement a Corrective Action Plan (CAP). In response to the warning notice it received, Northside Hospital Atlanta sent correspondence to CMS on its price estimation process. CMS determined the process did not comply with the Price Transparency Rule and requested a revised CAP, which the hospital did not submit. 

Northside Hospital Cherokee did not submit the requested CAP.

CMS then conducted technical assistance calls with each hospital, where it reiterated the violations and again requested the CAPs. Both hospitals failed to submit the CAPs, and, after continued noncompliance, CMS imposed CMPs. 

Ongoing Risk of Enforcement

The Price Transparency Rule was implemented in response to a provision in the Affordable Care Act requiring hospitals to publish their list prices for the services they provide. The Price Transparency Rule is part of a push for the health care industry to be more transparent in its pricing, with the ultimate goal of increasing consumer cost awareness and driving down health care costs.  

However, since the Rule’s enactment, reports have shown that hospital noncompliance with the reporting requirements is common. As of early June, CMS has issued over 350 warning notices and over 150 CAP requests to hospitals. Additionally, lawmakers have expressed concern over the lack of compliance with the Price Transparency Rule and called on the Department of Health and Human Services to increase oversight and to conduct regular audits of hospital compliance with the Rule.

Key Takeaway

CMS’s imposition of CMPs against the two Georgia hospitals indicates the agency’s willingness to use its enforcement authority to ensure hospitals are complying with their price reporting obligations. To avoid imposition of CMPs, hospitals should assess whether they are fully compliant with the requirements in the Rule. Hospitals must ensure their standard charges are published both in a machine-readable file and in a consumer-friendly display. Additionally, hospitals that have received a notice of noncompliance or other inquiry from CMS should prioritize their response to CMS, and submit CAPs as requested to avoid the imposition of CMPs.